Social Capital in Rural and Urban Communities1

Abstract Conventional wisdom says that social capital is more common among families in rural communities than urban communities. Using data from the 1988 wave of the Panel Study of Income Dynamics, we compare the prevalence, type, and extent of social exchanges in these places. Results indicate that families living in rural areas are more likely to exchange exclusively with kin than are families living in urban areas. In particular, families living in rural areas are more likely to receive money help from kin than families in urban areas. Results on patterns of giving are more complex, with rural origin families with younger household heads more likely to give support to kin, and rural origin families with older heads less likely to provide such support, as compared to otherwise similar families of urban origin. Finally, only modest urban‐rural differences in amounts exchanged (in dollars) are found among otherwise similar families. Overall, some of the urban‐rural differences in patterns of exchange are explained by different family characteristics; however, key urban‐rural differences remain, probably reflecting differences in norms and the availability of institutional support services in different areas.